What is import tax? Cases of import tax exemption – export tax and import tax reduction. Procedures for import tax exemption & export tax.
In the context of globalization, import and export play an important role in stimulating economic growth and strengthening cooperation between countries. To promote this development, the state has established an import and export tax exemption policy to encourage businesses to participate in international trade activities while creating conditions for the development of local industries. In this article, let’s find out with fdiinvietnam.com what import and export tax is and the cases of import and export tax exemption.
Cases of import tax exemption
1. What is import tax?
Import tax is a tax imposed on goods and services imported from abroad. Import tax rates are a means used by the Government to control the flow of goods and services, both ensuring domestic consumption and generating revenue for the national budget.
2. Cases of import tax exemption
Pursuant to the Law on Import and Export Tax 2016, the cases of import tax exemption include:
- Goods of foreign organizations and individuals enjoy privileges and immunities in Vietnam within the limits consistent with international treaties to which Vietnam is a member;
- Goods within the scope of duty-free baggage standards of entrants or imported goods for sale at duty-free shops;
- Goods are movable assets within the tax-free limit;
- Gift goods are exempt from import tax in the following cases:
- Gifts within tax-free limits;
- Gifts given to agencies and organizations using the state budget are permitted to be received by competent authorities;
- Gifts for charitable and humanitarian purposes.
- Goods traded in border areas, serving the production and consumption purposes of border residents, included in the List of goods and within the import tax exemption limit;
- Goods with value or tax payable below the minimum level, specifically as follows:
- Imported goods sent by postal service with customs value of less than 1,000,000 VND or tax payable of less than 100,000 VND;
- Goods with customs value of less than 500,000 VND or tax payable of less than 50,000 VND/import (*).
- Raw materials, components imported for processing and manufacturing export products;
- Goods imported into Vietnam are produced, processed, recycled, and assembled in duty-free zones without using foreign raw materials;
- Goods are temporarily imported and re-exported within a certain period of time, specifically:
- Goods, machinery, equipment temporarily imported and re-exported for organizing, participating in fairs, events, testing, research, etc.;
- Machinery and equipment temporarily imported and re-exported to replace and repair foreign ships and aircraft anchored at Vietnamese ports;
- Temporarily imported and re-exported goods for warranty, repair and replacement;
- Means of temporary import – re-export circulation to contain import and export goods;
- Goods traded during the temporary import – re-export period are guaranteed by a credit institution or have been deposited with an amount equal to the import tax amount.
- Goods not for commercial purposes such as samples, films, photos, models replacing samples, small quantity advertising;
- Imported goods to create fixed assets for subjects enjoying investment incentives, specifically as follows:
- Machinery, components, spare parts, equipment used for assembly or use in synchronization with machinery, materials serving the manufacture of machinery and equipment;
- Means of transport directly serving the project’s production process;
- Raw materials and construction materials that cannot be produced domestically.
- Plant varieties, livestock, fertilizers, and pesticides imported from abroad that cannot be produced domestically;
- Goods, raw materials, components, machinery, equipment, etc. that cannot be produced domestically are imported to serve the following activities:
- Oil and gas activities, shipbuilding;
- Printing and minting activities;
- Projects in industries with special investment incentives;
- Serving areas with particularly difficult socio-economic conditions, high-tech enterprises, enterprises, and scientific and technological organizations;
- Production of products with resource, mineral and energy costs below 51% of product cost;
- Manufacturing and assembling medical equipment;
- Production of information technology products and software;
- Environmental protection activities such as collection, transportation, treatment of waste, emissions, etc.;
- Educational activities;
- Scientific research, development, incubation and technological innovation activities.
- Machinery, equipment, components, etc. serving printing and minting activities;
- Goods directly serving security and defense work;
- Goods serving activities to ensure social security, overcome natural disasters, catastrophes, epidemics, etc.
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(*) Not applicable to gifts, goods sent by postal service and goods traded and exchanged by border residents.
Cases of export tax exemption
1. What is export tax?
Export tax is a tax applied to domestic goods exported to international markets or to duty-free zones. Like import tax, the state issues export tax exemption policies for a number of categories of goods to support special subjects, encourage investment and implement social policies.
2. Cases of export tax exemption
In addition to the items subject to export tax when shipped abroad, there are a number of categories of goods that are exempt from export tax, specifically as follows:
- Goods are exempted from export tax in accordance with international treaties to which Vietnam is a member;
- Goods within the scope of duty-free baggage standards of exiting persons;
- Goods are movable assets, gifts within the export tax exemption limit;
- Goods traded at the border, serving the production and consumption purposes of people in border areas;
- Goods whose value or duty payable is below the minimum level;
- Goods exported for processing are exempt from export tax calculated on the value of raw materials used to create processed products;
- Goods temporarily exported and re-imported within a certain period of time, specifically:
- Goods, machinery, equipment temporarily exported and re-imported for organizing, participating in fairs, events, testing, research, etc.;
- Machinery and equipment temporarily exported to replace and repair Vietnamese ships and aircraft;
- Temporarily exported and re-imported goods for warranty, repair and replacement;
- Means of temporary export – re-import rotation to store import and export goods;
- Goods traded during the temporary export-re-import period are guaranteed by a credit institution or have been deposited with an amount equal to the import tax amount.
- Goods not for commercial purposes: samples, films, photos, models replacing samples, small quantity advertising;
- Goods serving activities to ensure social security, overcome natural disasters, catastrophes, epidemics, etc.
Procedures for import tax and export tax exemption
The basic steps in the import-export tax exemption procedure are as follows:
➤ Step 1 : Submit application for export and import tax exemption to customs authorities in 2 ways:
- Submit paper documents directly or by post to the Import-Export Tax Department – General Department of Customs;
- Submit application online via the Customs Electronic Data Processing System.
Before submitting the application, the taxpayer must fill out a declaration form to identify and declare the goods and calculate the import and export taxes exempted when carrying out customs procedures.
Note:
Depending on each specific case, prepare the corresponding import and export tax exemption documents.
>> See details: Import and export tax exemption documents.
➤ Step 2 : Customs authority checks the documents
Within 3 working days from the date of receipt, if the dossier is incomplete, the customs authority will send a notice to the taxpayer to supplement the dossier.
➤ Step 3 : Customs authorities compare tax exemption file information with current regulations to apply tax exemption policies according to regulations.
Note:
If the competent authority discovers that the declared goods are not subject to import tax exemption, individuals and businesses must pay tax and be punished for violations (if any).
>> See details : Procedures for import and export tax exemption.
Cases of import tax reduction
In addition to the above-mentioned subjects exempted from import and export taxes, enterprises are also entitled to a reduction in import and export taxes on goods if they meet the following conditions:
- Import and export goods are being monitored by customs authorities;
- Imported and exported goods that are damaged or lost must be certified by a competent authority.
Note:
- The tax reduction level will depend on the actual damage rate of the goods;
- In case of damaged or total loss of goods, no tax is payable.
>> See details: Documents and procedures for reducing import and export taxes.
Frequently asked questions about import and export tax exemptions
1. What are the duty-free items imported from China?
Tax-free items imported from China such as:
- Manufactured and assembled goods;
- Goods temporarily imported and re-exported within a specific period of time;
- Raw materials, components, spare parts, etc. that cannot be produced domestically;
- Other cases: gifts, goods with value below the minimum, luggage of immigrants, goods not serving commercial purposes…
>> See details: List of goods exempt from import tax.
2. What are the steps in the import and export tax exemption procedure?
➤ Step 1: Submit export and import tax exemption documents to customs authorities in 2 ways:
- Submit paper documents directly to the customs office or by post;
- Submit application online via the Customs Electronic Data Processing System.
➤ Step 2: Customs authority checks the documents;
➤ Step 3: The customs authority compares the tax exemption file information with current regulations to apply the tax exemption policy according to regulations.
>> For details, see: Procedures for import and export tax exemption.
3. Are agricultural exports subject to tax?
Agricultural products for export that are not on the list of goods exempt from export tax are subject to import tax.
>> See details: List of goods exempt from import tax.
4. Are sample goods subject to import tax?
Sample goods imported into Vietnam for non-commercial purposes will be exempt from import tax.
>> See details: Cases of import and export tax exemption.
5. Are goods exported on the spot subject to tax?
Raw materials imported for processing and manufacturing export goods, then re-exporting or selling processed products from imported raw materials under the form of on-site export are not subject to import tax.
>> See details: Cases of export tax exemption.
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